For antsy investors, the hardest part of making money with Bitcoin is doing nothing.
There could be some overlap between the properties of cryptocurrency and stocks, but certain differences are stark and persistent. Among them is volatility, as even Bitcoin (BTC 1.92%), the cryptocurrency with the biggest market cap, is prone to sharp and sudden drawdowns.
Cryptocurrency is supposed to be the people's money, and I'd hate to see anyone take an unnecessary loss from trading Bitcoin. So, if you're reeling from recent events in the crypto-sphere, I offer you a quick dose of perspective on the power of doing absolutely nothing. For example, a $100 Bitcoin investment five years ago would be worth $370 today.
Bitcoin's brutal battery
After resting comfortably at $29,000 for a solid month, Bitcoin took a breathtaking drop to $26,000 the other day. That's a 10% cliff dive in just a few days. But unlike investors in the realm of stocks, Bitcoin traders can't cite an earnings report or a disappointing product launch as a cause for the drop.
Asking why it happened is a natural response, but it might only lead to frustration in this instance. The general consensus seems to be that the Bitcoin sell-off was prompted by the one-two punch of hawkish-sounding statements from a Federal Reserve Board meeting ("... most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy.") followed by aWall Street Journal report that Elon Musk's SpaceX had sold its Bitcoin holdings.
The financial press needs something to talk about during a slow, low-volume summer for stocks, and the Bitcoin rout provided ample fodder for commentators.
Stay small, and just HODL
So, all of a sudden, folks are worried about SpaceX's crypto holdings (or lack thereof). In their panic, they apparently forgot that financial behemothBlackRock is working on getting approval for a spot Bitcoin exchange-traded fund (ETF).
Now,that's newsworthy. BlackRock's clout is considerable, its pockets are incredibly deep, and a spot Bitcoin ETF would truly be a game changer. BlackRock's crypto involvement matters much more than SpaceX's trades. It may even, perhaps, be more essential than the Fed's economic outlook, which can change from one meeting to the next.
If these considerations aren't helping you sleep at night, feel free to take a glance at Bitcoin's history of drawdowns. If you're going to HODL (hold on for dear life) with calm and confidence, you'll need to make volatility your friend (or at least a roommate you can live with).
After all, Bitcoin has had multiple drawdowns of 30% or more. I can't make any guarantees about the most recent pullback from around $69,000, but previous crashes invariably resolved with new Bitcoin bull markets.
In addition to learning one's history, it certainly helps to maintain small positions with cryptocurrency. Thus, a mere $100 stake in Bitcoin five years ago, when it was trading at around $7,000, would have resulted in an immediate 50% crash as the digital coin fell to $3,500 in early 2019. But then, turning a $100 investment into $50 shouldn't be too painful for most investors.
Fast-forward to the present, and with Bitcoin's price gyrating wildly but landing near $26,000 from the starting point of $7,000, that $100 investment would now be worth approximately $370. That's an impressive return on one's capital, just for having sat on one's hands for half a decade. It's true that you could have cashed in your Bitcoin position for $980 at the very peak in October 2021, but that's an unrealistic target and almost everyone missed it. Patient ownership over the long term beats quick-draw day trading almost every time.
Ultimately, the events concerning SpaceX, the Fed, and even BlackRock shouldn't be of life-changing consequence to investors who are willing to stay small and extend their time frame.
And just remember that a dose of perspective is an effective sleep aid for headline-harried HODLers when Bitcoin bends and buckles.
David Moadel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
FAQs
Thus, a mere $100 stake in Bitcoin five years ago, when it was trading at around $7,000, would have resulted in an immediate 50% crash as the digital coin fell to $3,500 in early 2019.
How much will 1 Bitcoin be worth in 5 years? ›
We predict that Bitcoin will hold an average price of $60,000 in 2024, thanks to the Halving event, and settle more in 2025 with an average of $65,000. In 2026, we see Bitcoin trading as high as $90,000 by the end of the year. By 2030, we predict that Bitcoin could reach a high of $160,000.
How much would 100 dollars in Bitcoin be worth today? ›
Latest USD to BTC Converter Rate
The current price of 100 US Dollar in Bitcoin is 0.00149758 BTC. The price is calculated based on rates on 33 exchanges and is continuously updated every few seconds.
How much will $1000 in Bitcoin be worth in a year? ›
Bitcoin One Year From Now
That said, Modulus' projections indicate that in one year, Bitcoin may rise to $96,000. “Were that projection to come to fruition, a $1,000 investment today could be worth approximately $1,333 in twelve months, though it could also become $750 if prices fall.
What is the average return on Bitcoin for 5 years? ›
Average returns
| Period | Average annualised return | Total return |
|---|
| Last year | 159.3% | 159.3% |
| Last 5 years | 76.3% | 1,601.1% |
| Last 10 years | 64.1% | 14,039.8% |
Bitcoin Price Prediction 2025
With the launch of potentially more Bitcoin-related financial services and the global adoption spark of Bitcoin, BTC prices will maintain a bullish trend in 2025. The cryptocurrency is expected to create a high of $140,449 with a low of $61,357.
What will 1 Bitcoin be worth in 2050? ›
Similarly to the prediction for 2040, we've used Bitcoin's 3-year CAGR of about 19% to calculate what the price of Bitcoin would be in 2050 based on those parameters. According to the calculation, Bitcoin's price could increase to $5,411,000 by 2050 and grow by more than +10,980% over the next 27 years.
How much is $100 in Bitcoin bought 5 years ago? ›
Thus, a mere $100 stake in Bitcoin five years ago, when it was trading at around $7,000, would have resulted in an immediate 50% crash as the digital coin fell to $3,500 in early 2019. But then, turning a $100 investment into $50 shouldn't be too painful for most investors.
How much will 1 Bitcoin be worth in 2030? ›
Bitcoin (BTC) Price Prediction 2030
According to your price prediction input for Bitcoin, the value of BTC may increase by +5% and reach $ 86,830.70 by 2030.
How much would $500 in Bitcoin be worth today? ›
USD to BTC
| Amount | Today at 3:26 pm |
|---|
| 50 USD | 0.000780 BTC |
| 100 USD | 0.0016 BTC |
| 500 USD | 0.0078 BTC |
| 1,000 USD | 0.0156 BTC |
4 more rowsIf you had invested $1,000 into bitcoin five years ago, the investment would have grown by 1,352% and be worth around $14,524 as of Feb. 14. If you had bought $1,000 worth of bitcoin 10 years ago, it would have grown by 7,644% and be worth around $77,443 as of Feb.
How much Bitcoin to buy to become a millionaire? ›
So, 10 times from those levels would mean that Bitcoin could go as high as $350,000, Saylor said. If this is the case, you would need to own 2.86 BTC to become a millionaire. It would cost around $190,000 today.
What happens if I put 500 in Bitcoin? ›
If Bitcoin returns to all-time highs, a $500 investment today would be worth $822.50, representing a return of +64.4% which bring a little ROI to your investment.
Will Bitcoin be worth anything in 10 years? ›
In its 2023 Big Ideas report, Ark Invest laid out several price targets for Bitcoin. The report sees Bitcoin hitting price targets in 2030 of $257,500 in the bearish forecast, $682,000 in an average market and $1.48 million in a bullish market.
What is the 10 year return of Bitcoin? ›
In the last 10 Years, the Bitcoin (^BTC) Commodity obtained a 64.86% compound annual return, with a 76.96% standard deviation. Discover new asset allocations in USD and EUR, in addition to the lazy portfolios on the website.
How much will a Bitcoin be worth in 20 years? ›
Fidelity Predicts: $1B per 1 BTC by 2038 — 2040
Jurrien Timmer, the Director of Global Macro at Fidelity Investments, thinks the value of a single Bitcoin could reach $1 billion by the year 2038 — very close to our Bitcoin price prediction 2040 target date. Timmer's demand model is rooted in Metcalfe's Law.
What is the fair value of Bitcoin in 2030? ›
In Ark Invest's "Big Ideas 2023" report, the investment firm outlined eight key use cases for Bitcoin, projected their growth potential, and then aggregated the market size of each for the year 2030. That's how Ark Invest arrived at its $1.5 million price target for Bitcoin.
What is the 10 year average for Bitcoin? ›
In the last 10 Years, the Bitcoin (^BTC) Commodity obtained a 64.86% compound annual return, with a 76.96% standard deviation.
